Libya rebels win aid, West sees Gaddafi exit

ABU DHABI/TRIPOLI (Reuters) - Libya's cash-starved rebels on Thursday won more than $1.1 billion (672 million pounds) of aid at a conference of Western and Arab powers that focussed on the end-game for Muammar Gaddafi and the country's civil war.

U.S. Secretary of State Hillary Clinton said talks were under way with people close to Gaddafi that had raised the "potential" for a transition of power, but added: "There is not any clear way forward yet."

Also referring to what he called multiple feelers from the Gaddafi government, Australian Foreign Minister Kevin Rudd said Gaddafi's end "may come sooner" than expected.

NATO warplanes relentlessly bombed Tripoli as the rebels said at the talks in Abu Dhabi that they hoped to restart oil production soon.

At the United Nations, the prosecutor of the International Criminal Court (ICC) said its investigators had found evidence linking Gaddafi to a policy of raping opponents.

A possible war crimes prosecution could be an incentive for Gaddafi to cling to power, but Senegalese President Abdoulaye Wade, offered to help ease his former African Union ally's exit from power and appealed to him to step down.

"It is in your own interest and the interest of all the Libyan people that you leave power in Libya and never dream of coming back to power," Wade said during a visit to the rebels' eastern stronghold of Benghazi.

"I can be one of those who help you pull out of political life and the sooner you leave the better," Wade, the first foreign head of state to visit the rebel city, said.

"PEOPLE CLOSE TO GADDAFI"

Clinton declined to give details of discussions over Gaddafi's future.

"There have been numerous and continuing discussions by people close to Gaddafi and we are aware that those discussions include among other matters the potential for a transition," she said at the end of the Libya contact group meeting.

A bipartisan group in the U.S. Congress urged President Barack Obama to use frozen Libyan government assets to pay for humanitarian aid for Libyan people caught up in the civil war.

NATO air strikes took place through Thursday after a lull following the heaviest day of bombings since March.

Rebel Oil and Finance Minister Ali Tarhouni said they hoped to restart production of 100,000 barrels a day "soon," without specifying a timeframe, and called for more aid, immediately.

""Our people are dying ... So my message to our friends is that I hope they walk the walk," he told reporters.

Italian Foreign Minister Franco Frattini told Reuters Rome would give the rebels up to 400 million euros ($586.1 million) of cash and fuel aid backed by frozen Libyan assets.

Kuwait said it would immediately transfer $180 million to the rebels, while the UAE said it would make an announcement on financing and the diplomatic status of the rebels soon.

French Foreign Minister Alain Juppe said about 290 million euros in assets would be unfrozen by French banks. Turkey, which will host the next meeting in Istanbul during July, said it had set up a $100 million fund.

"END-GAME"

The 22-nation contact group, which includes Western and Arab countries as well as organisations such as the United Nations, is pressing the rebels to give a detailed plan on how they would run the country if Gaddafi stood down or was toppled.

"The international community is beginning to talk about what could constitute end-game to this," one senior U.S. official told reporters ahead of the meeting.

That official listed scenarios including a cease-fire, which Tripoli has demanded include leaving Gaddafi's fate open.

"We are for the people of Libya and only for the people of Libya," Turkish Foreign Minister Ahmet Davutoglu said. "But at the same time we need to find a political solution ... we need to have a roadmap to keep Libya as a united country and to complete this transitional period as a successful process."

The rebel Transitional National Council (TNC) and its Western allies have rejected Libyan government cease-fire offers that do not include Gaddafi stepping down first.

U.S. officials on Wednesday announced delivery of the TNC's first U.S. oil sale, which they hope will get money flowing.

One of the highest-ranking defectors, Libyan U.N. ambassador Abdurrahman Shalgam, said the rebels needed $3 billion to cover salaries and food costs for the next four months. Libyan assets in Italy could contribute to that sum, he said.

On the military front, U.S. Defence Secretary Robert Gates said that European countries flying the bulk of the air strikes are stretched thin and will find the NATO-led mission more painful unless other allies do more.

HELICOPTERS TO ACCELERATE ATTRITION

Rear Admiral Philippe Coindreau, who heads French operations over Libya, said that the strikes against Gadaffi's forces were increasingly wearing them down.

"Everyday I'm seeing the attrition of Gaddafi's assets and forces," Coindreau said in a videoconference from the Charles de Gaulle aircraft carrier. "The recently arrived helicopters bring added-value and accelerate this."

The alliance says the bombing aims to protect civilians from the Libyan military, which crushed popular protests in February.

The Libyan leader says the rebels are Islamist militants and NATO attempting to grab Libya's oil.

At the United Nations, the ICC prosecutor said its investigators have evidence linking Gaddafi to a policy of raping opponents and may bring separate charges on the issue.

At the United Nations human rights body, Libya's envoy rejected a separate U.N. report accusing its forces of crimes.

Rebels in the besieged western city of Misrata said thousands of pro-Gaddafi forces launched a major advance on the city killing at least 12 people on Wednesday.

"The situation is a stalemate --- both sides are adopting hit-and-run tactics," rebel spokesman Abdelsalam said from Misrata late on Thursday after more bombardments on the city. "NATO has to change something. Their goal is unclear."

NATO disputed the account.

"There were some small groups of pro-Gaddafi forces who were trying to advance towards the centre of Misrata ... but I think this is an embellishment," a NATO official said.

Gaddafi troops and the rebels have been deadlocked for weeks between the eastern towns of Ajdabiyah and the Gaddafi-held oil town of Brega. Rebels also control the western city of Misrata and the range of western mountains near the border with Tunisia.

(Additional reporting by Khaled al-Ramahi in Misrata, Sherine El Madany in Benghazi, Adrian Croft in London, Humeyra Pamuk, Martina Fuchs and Mahmoud Habboush in Abu Dhabi, Joseph Nasr in Rabat and Elizabeth Pineau in Paris; Writing by John Irish and Joseph Logan; Editing by Tim Cocks and Andrew Heavens)